trevelyan

You're making the mistake of thinking that blockchains are databases. Also of imagining that blockchain applications require smart contracts (you can run applications on a distributed network simply by affixing data to transactions, check out Saito for an example of how this is done).

The blockchain is a self-sustaining PKI network. It eliminates MITM attacks and facilitates the use of PKI technology by making it trivial for nodes to read/write/verify information that is sent over the network. On the economic layer, the fact that it pays its own way eliminates the ability for network operators to create information-layer monopolies (i.e. App Store).

If you think about blockchain as a database, you'll be stuck thinking about the use cases that involve a database. If you think about blockchain as smart contracts, you'll be stuck comparing them to real world contracts. Start thinking of decentralized app stores (which cannot impose constraints on the revenue models of their hosted apps) or advertising networks which let users put advertisements on any webpage. There are tons of reasons to pay a small fee to send information across a secure and tamper-proof network.

Just put it on Saito and pay for it to stay on-chain for however long you need.

Look into Saito. Universal broadcast PKI networks are useful for more than just money.

Saito (saito.tech) is hiring in Beijing, China. We are looking for module developers and network engineers.

Thoughtful taxonomy on the weaknesses of other scaling approaches in here.

Bad analogy. A 1992 car does not change when new models are released to others. But changes to neighbourhoods from increased density can be negative to quality of life, such as having a quiet road suddenly become a connector road for large amounts of commuter traffic (kids no longer playing outside), or schools get overcrowded, or there is standing-room only on the subway for a long commute into town.

Saito | Beijing, China | full-time | https://saito.tech

Saito is developing a scalable blockchain that can process terabytes of data a day. The mechanism that supports this is counterintuitive but once grasped will genuinely change the way you think about blockchain. We are proud to be supported by the smartest people in Asia:

https://medium.com/@SaitoOfficial/saito-raises-2-million-usd....

We are currently looking to hire a network engineer who can assist with network rollout and scaling, as well as an application developer (NodeJS, HTML+CSS) to help polish data-intensive distributed applications (think email, reddit, facebook, etc. on a blockchain). Things you should know about us are that we are a smaller team based in Asia (currently Beijing, eyeing Singapore) and will need anyone who joins us to spend a non-trivial amount of time with us physically this coming year, although some time elsewhere is also fine.

Saito is an adventure worth taking. If you are interested please send us an email at dsvid@saito.tech or message me directly here on Hacker News.

Any suggestions on how Bitcoin can deal with that fee-recycling attack? The 2200 scenario given as an example halfway through the piece?

Saito | Beijing, China | full-time | https://saito.tech

Saito is developing a scalable blockchain that can process terabytes of data a day. The mechanism we use to do this is counterintuitive, but once grasped will genuinely change the way you think about blockchain. We are proud to be supported by the smartest people in Asia:

https://medium.com/@SaitoOfficial/saito-raises-2-million-usd...

Right now we are looking to hire three people. We need someone great with UI/UX who can help us improve our core blockchain applications (email, payment channels, social networks and more). We need an experienced engineer to help develop features in our core code (currently NodeJS), and we need a network scaling engineer to help us push network capacity between Asia and North America to its theoretical limits among other things. We have some write-ups here:

http://org.saito.tech/jobs/open-positions/

Things you should know about us: we are a smaller team (four people) planning to be in Beijing for about a year. And while we're not committed to China long-term and expect to be flexible with remote work eventually, we do need anyone who joins us to spend a non-trivial amount of time in Asia this coming year. We can also guarantee this is an adventure worth taking. Interested? Please message me directly -- questions on the job or our scaling method all welcome -- my email address is in my HN profile.

I really just wanted to comment because almost no-one gets what you wrote about the importance of data-ordering. So the piece started strong, but then felt like it started tripping over itself.

On the permanence/immutability issue, I guess my opinion is that permanence is distinct from immutability and that while all blockchains require immutability, they can exist with varying degrees of data persistence. I tend to think bitcoin would be perfectly safe running on a 100 year chain with periodic hardforks to upgrade the genesis hash, for instance, and that it would be a bit strange to suggest that this wouldn't count as a blockchain, even if the trade-offs would make the network lose some properties of "digital gold". At a minimum, arguing otherwise would seem to imply that UBTC isn't a blockchain, which is obviously wrong.

If the author is reading this, the most interesting thing about your article is that it creeps towards the recognition of something important (i.e. that data ordering and data permanence are quite different things) before it balks at the implications and adds unnecessary properties to its definition of a blockchain.

This makes the piece come across ideological. As a case in point, you write that the public aspect of a blockchain is what ensures its permanence but that is not at all the case. The public aspect is what guarantees open access. Open access in turn guarantee decentralization under conditions where decentralization is economically feasible. The only thing that guarantees permanence is the economic incentive structure that pays participants to store and distribute data.

We don't have a good taxonomy for discussing these ideas yet, but most people working on scale are beyond this. Ethereum is experimenting with rent. Bitcoin variants exist which have adjusted their genesis block manually. Some layer-two networks are designed be transient, while Saito uses a transient blockchain to put bandwidth-intensive applications directly the first layer. The direction of development in the space is tilting very clearly towards utility networks and disposable data-structures. The disagreement is over at what layer this needs to take place, and how to preserve things like open access while paying for things like bandwidth and storage.

The establishment media certainly hates him.

You might like saito.tech. Very early stage, but it is a genuine solution to blockchain scaling that powers applications rather than apps. Be sure to check out the decentralized (on-chain) Reddit for a sense of how flexible a big-data PKI network can be.

There are other interesting projects nearing fruition like Radix and Gun that are trying to create different types of distributed databases that have some of the properties of blockchains.

Work for cheap

Yes. They may not want people to know they are considering leaving their current job. And they may not keep their job if people find out they aren't fully committed.

Hi Bill,

Yes -- Saito is the first "transient blockchain" and everything will technically fall off the network eventually unless someone acts to preserve it.

It is possible to maintain data on-chain, although in most cases the users sending transactions and the users receiving transactions will not want to pay for that and will prefer bear the burden of archiving them. There is no reason for the entire network to backup my email inbox, for instance. So "permanent storage" will only really be needed for tokens that represent monetary value.

We do have two ways to maintain data on-chain in perpetuity though:

1. applications can manually rebroadcast transactions whenever they near the end of the chain. This is dirt-cheap and helps preserve the security of the network for complicated reasons that you can read up about in our explanation of how Proof-of-Transactions / Proof-of-Relay works.

2. nodes creating new blocks are forced to rebroadcast transactions that meet consensus/code-level criteria qualifying for rebroadcasting (i.e. their "rebroadcast" flag is set and they have enough money to pay for it. We intend this as a fallback rather than the main mechanism -- it will be more expensive.

Generally though, shifting to a transient chain is important as it is one of the steps needed to "fix" the economics of existing consensus mechanisms. It allows us to price the cost of storing a transaction forever by dividing infinity up into manageable chunks during each of which storage costs are accurate and market-driven and fees are handed over to the nodes that are actually doing the work in that point at time.

Hi Jonnie,

There is actually -- see comment blelow -- but if you're concerned about SSL just go through our reverse proxy that adds it. Some links may break:

https://demo.saito.tech

We should have default SSH in the full-node client itself by the time we launch our public testnet in a few months.

hey craftyguy -- thanks for the reply and for taking a look at Saito. You can access the server over https if you'd like at http://demo.saito.tech (this runs through a reverse proxy that layers on SSH) although this may break some links in our live demo.

The reason the demo defaults to plain http is that the server that feeds out the applications is part of the full-node software and it does not support HTTPS yet. We are intent on fixing this, but it didn't seem like a critical thing to worry about for this dev release, which is focused on getting people a working version that can be run on localhost and give people the tools to build genuinely distributed applications. We hope to get this fixed in the next two months before launching our public testnet and DNS system. Right our biggest dev focus is overhauling the network code for multiclient connections.

With that said, in the long-run it won't matter if users http or https to connect to the blockchain. Saito is not vulnerable to MITM attacks and users can use Diffie-Hellman key exchange mechanisms to swap keys directly over the blockchain. We can think of it as an improved version of TCP/IP that is actually secure but that will cost a few fractions of a cent for every message we need to send to unknown and anonymous peers.

These guys are the real deal.

I was disappointed that YCombinator funded Optimizely given that they were expressly copying the idea of a small, single-founder who was sharing his business and experience on these boards. As an observer admittedly without knowledge of who made that funding decision and why, it still seems the most unethical thing YC has ever done.

> It comes down to intent

There is nothing in the film that communicates this. It may be that we are supposed to view the film this way, but the film itself is not sophisticated in communicating this message. Meanwhile, there are many characters who are clearly well-intentioned (Poe and Finn) whose actions seem to be explicitly criticized.

Lucas was a far more sophisticated filmmaker. In his prequels the Jedi are deeply flawed, and the audience is supposed to notice that they abandon their commitment to peace ("I can protect you, but I cannot fight a war for you") to the point that they die (literally and allegorically) marching into war. Likewise, Luke's effort to rescue his friends in Empire is well-intentioned, but nearly destroys him because he chooses violence as his tool (similar to Anakin's efforts to rescue Padme through violence). It is not accidental that the temptation that Vader offers Luke is the same temptation Palpatine offers Anakin: the use of violence for the sake of good ("join me, and bring peace and order to the galaxy") -- a trap in both films.

> The problem with 2008 ... was that the fundamental risk was obscured

Yes. And this is impossible with smart contracts. You can commit fraud by pricing the asset, but you can't prevent the market from demonstrating its quality in real-time.

With smart contracts there would have been a housing bubble, but there would also have been an inflow of capital when the market-value of the majority of CDOs crashed below about 80 cents on the dollar.

Typical of what? It is impossible for the market to be rational without information. Rationality is predicated on it.

Hey Lionheart. Just to be clear -- I don't think TLJ is devoid of meaning. The film clearly wants to say that anyone can be a hero and that what matters is not being trapped by the past (protect what you love, learn from your mistakes and move on). There is nothing wrong with this message.

It doesn't bother me if people like TLJ, although I personally don't think the film makes much sense. If Yoda deceives Luke that saves TLJ from having Yoda actually mirror Kylo Ren, but it doesn't explain the fire and lightning (Sith tools associated with hell imagery) nor does it resolve the underlying problem since deception is also Dark Side behaviour....

There are a few other areas where the film contradicts itself, but this is an obvious one: if we take the film seriously we must surely ask ourselves why Yoda is acting like a Sith Lord? I didn't see any attempt to answer that puzzle in the film and while we may get the solution in film #3, as far as I can tell TLJ just accepts that whatever Yoda does is good (because he is Yoda) and whatever Kylo Ren does is bad (because he is the villain). The filmmakers have bought into the loose symbolic framework of the saga, but they don't seem to understand it and/or act consistently within it. To the extent there is a message, it comes out because the good guys tell us exactly what it is and we aren't supposed to think too critically about it.

The problem with this is that overall losses were nowhere near 65 cents on the dollar -- only 20 percent of US mortgages were subprime at the peak of the GFC.

If the market was rational and had full insight into the performance of its securities, losses would have been no more than 20-35 cents on the dollar. That is enough to cause a major crisis, but it wouldn't trigger the paralysis of the global financial system.

> is largely a part of default EXPECTATIONS resetting up

Yes, exactly! But take the next step and ask what sets EXPECTATIONS about the worth of a security in a smart-contract environment? It stops being generalized market fear and it starts being actual DATA about performance.

> Ethereum (which, by the way, is too slow to run CDO pricing models)

You don't run the monitoring software ON the blockchain (you could but it would be inefficient). You run that off-chain using blockchain analysis software.

> it is not possible even in principle to tell if the ibank has rigged a CDO to have more than it's share of lemons!

Yes, you can purchase a bad CDO on a blockchain just as easily as you can purchase bad real estate in real life. Nothing prevents humans from misrepresenting data. But that isn't the point of the blockchain.

The point is that the transparency of the blockchain lets you (and others) know when you're holding a lemon, because you can see in real-time that no-one is paying off the mortgages in your CDO. What you do when that happens is a good question and the blockchain can't help [1], but it doesn't crash the entire market because people can tell the difference between your CDO and the quality ones that are still 100% good.

[1] it actually can help in one important way -- it provides an indisputable record of contract execution and payments that is not contained within the computer system of your counterparts (the bank). So if there is fraud it will be much easier to prove it to the courts than if you need to subpoena records out of the bowels of a corporate banking system.

> The idea that it would become trivial to distinguish between good and bad investments seems to me to be incredibly naive.

It is not naive. It is exactly how smart contracts work.

If you purchase a CDO on a blockchain, you are purchasing a share of whatever revenue paid into another contract. You can monitor those contracts, and the ones that are programmed to pay into THEM, and the ones that are programmed to pay into THEM ad infinitum.

> Your argument seems to be simply that radically more data would enable better predictors.

The point is that transparency enables markets to accurately price risk and prevents the sort of market paralysis that caused the liquidity crunch.

Yes, it's true that people COULD have spent weeks figuring out the status of at least some of the CDOs on the market. But in reality no-one was reading 200 page long prospects that listed the exact mortgage originators and housing complexes of their CDOs. Buyers and sellers did not necessarily even have this data in peer-to-peer marketplaces. Financial institutions and their brokers bought securities based on their ratings, and dumped them ASAP once it became clear the entire sector was poisoned and they were doubtless overvalued.

> unless you force every contract to be public, blockchain technology will not help you that much

Smart contracts are public BECAUSE blockchains are open access. All parties can see the transfer of tokens on the network for the contracts that matter to them. No-one in the public necessarily knows what any contract represents, but if I am sold one I can monitor it in real-time. That was not possible with mortgage backed securities in 2007.

You're right that it was possible for people to consult the original (think, paper-based prospecti) in at least some cases, but most people relied on the ratings agencies and they claim to have essentially greenlit their ratings on what the Black–Scholes equation told them, using assumptions that were convenient but untrue (i.e. Gaussian cupola -- that defaults would not be correlated).

Transparency was absolutely the underlying issue. Read "Too Big To Fail" or "The Great Short" or any of the other histories of the Financial Crisis. The way CDOs were bundled and tranched made it effectively impossible for purchasers or banks to know which properties were actually covered by any CDO.

No-one knew what was in them -- the value was asserted by the ratings agencies and they were purchased based on expected rate-of-return. Even the people who went short on the market ended up using heuristics: there is a wonderful passage in The Great Short which describes a character who tells his broker that he will short anything bought by one of the people he has just met.

Once the extent of fraud became clear the entire market dumped down to 35 cents on the dollar. The fact that transparency was an issue is also apparent right here, since nowhere near 65% of consumer mortgages failed. But no-one would buy because no-one could tell if any particular CDO was backed by anyone who was still capable of making payments.

With Ethereum and smart-contract based mortgage systems this completely disappears, since the blockchain broadcasts every single payment made in real-time and it is possible for anyone to simply look and see if whether defaults are rising or falling among the mortgages that underpin their collateralized securities.